Client protection and sustainable performance in microfinance institution

Nor Maisarah Bakar, Rashidah Abdul Rahman and Zuraeda Ibrahim

International Journal of Productivity and Performance Management, 2019, vol. 69, issue 4, 651-665

Abstract: Purpose - Microfinance institutions (MFIs) provide credit to low-income beneficiaries, enabling them to gain access to financial assistance. To ensure that clients are protected, all MFIs should adhere to basic corporate governance principles to guarantee uniform standards, transparency and good corporate governance practices in their institutions. Hence, the purpose of this paper is to explore the client protection practices and sustainable performance of Amanah Ikhtiar Malaysia (AIM), a leading MFI in Malaysia. Design/methodology/approach - Closed-ended questionnaires were distributed to managers and assistant managers at 76 AIM branches across the peninsular Malaysia. A response rate of 68 per cent was achieved from the total questionnaires distributed. Findings - The result shows that the level of client protection in AIM is high. It shows that accountability and debt collection process have a significant influence on the level of sustainable performance of AIM, whereas transparency and transaction costs have an insignificant impact on the level of sustainability of AIM. Consistent with the agency theory and institutional theory, the result also implies that having better debt collection process policy and structure, and accountability among management will enhance the level of sustainability of AIM. Originality/value - Previous studies focused on the single issue of sustainability in microfinance, such as on repayment performance among the poorest people whom AIM served as clients. However, studies on the accountability towards clients are still underdeveloped by researchers. Hence, the current study fills the gap by examining whether client protection affects the sustainability of AIM.

Keywords: Microfinance; Sustainability; Sustainable performance; Client protection (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijppmp:ijppm-03-2019-0127

DOI: 10.1108/IJPPM-03-2019-0127

Access Statistics for this article

International Journal of Productivity and Performance Management is currently edited by Dr Luisa Huatuco and Dr Nicky Shaw

More articles in International Journal of Productivity and Performance Management from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().